R.O.C vs M/S. Shield Shoe Co
2022 Latest Caselaw 7457 Raj/2

                   HIGH COURT OF JUDICATURE FOR RAJASTHAN
                               BENCH AT JAIPUR

                             S.B. Company Petition No. 12/1987

             The Registrar of Companies, Rajasthan, Jaipur.
                                                                                ----Petitioner
                                                 Versus
             M/s. Shield Shoe Company Private Limited, A-23, Matsya
             Industrial Area, Alwar.
                                                                              ----Respondent

For Petitioner(s) : Mr.Gaurav Sharma Saraswat, Adv. For Respondent(s) : Mr.Anant Kasliwal, Senior Advocate with Ms.Charu Pareek, Dr.Diwakar Chopra, Mr.Ravindra Pal Singh & Mr.Anuroop Singhi, Advocates.

HON'BLE MR. JUSTICE ASHOK KUMAR GAUR Order REPORTABLE 24/11/2022

Matter comes up on the report No.11017 dated 10.02.2021

filed by the Official Liquidator and the objections to the said

report, submitted by the legal representatives of the

shareholder/contributory late Shri F.C.Pahwa.

2. The Official Liquidator in his report dated 10.02.2021 has

narrated the fact of winding up of M/s.Shield Shoe Company Pvt.

Ltd. (Company in Liquidation) vide order dated 12.05.1989 passed

in S.B.Company Petition No.12/1987. It has been pointed out that

this Court on 07.07.2020 directed the Official Liquidator to issue

advertisement in Form No.91 of the Companies (Court) Rules,

1959 and to conduct a meeting of the shareholders. Pursuant

thereto, the Official Liquidator conducted the shareholders'

(2 of 19) [COP-12/1987]

meeting on 02.09.2020 and counsel appeared on behalf of the

shareholders-Pahwa family.

3. The Official Liquidator has prayed that this Court may direct

the Pahwa family and legal representatives of late Shri F.C.Pahwa

to furnish separate power of attorney duly executed on non-stamp

paper of the requisite amount, as per the Rajasthan Stamp Act

and to furnish original share certificates as well as succession

certificate, as the same are mandatorily required by the Official

Liquidator and only after obtaining permission from the Court, the

Official Liquidator would be in a position to take further action, as

per the provisions of the Companies Act, 1956 and the Rules,

framed thereunder.

4. The matter was taken up on 31.03.2022 and counsel

appearing for the Official Liquidator pointed out that family

members of the shareholder/contributory had submitted

indemnity bond, power of attorney and an affidavit to the effect of

loss of original share certificate, however, as per Rule 280 of the

Companies (Court) Rules, 1959, if the dividend is required to be

paid to the deceased contributory of more than Rs.500/-, then

succession certificate is required. On that day, Mr.Anant Kasliwal,

Senior Counsel appearing for the contributory submitted that he

has filed reply and objections to the report and requested that this

Court has inherent power, for securing ends of justice or to

prevent abuse of process of Court, to dispense with filing of

succession certificate. Counsel also submitted that the present

case is a rare case where surplus fund is available and as such the

(3 of 19) [COP-12/1987]

legal representatives of the promoter, are entitled to get their

money.

5. This Court, after hearing counsel for the parties, granted

time to address the issue of invoking power under Rule 9 of the

Companies (Court) Rules, 1959 and to consider as whether in

absence of succession certificate, the Court can exercise its

inherent power.

6. The Legal representatives of the original shareholder/

contributory have filed objections to the report, filed by the Official

Liquidator and submitted that in the meeting dated 02.09.2020,

Advocate of the legal representatives of the shareholders had

submitted the death certificate of Shri F.C.Pahwa along with

authorization letter, executed in favour of Arvind Pahwa, in respect

of all the proceedings for liquidation.

7. The legal representatives submitted in the objections that

general power of attorney, issued by Arvind Pahwa, in the capacity

as legal representative and authorized representative of other

legal representatives of late Shri F.C.Pahwa and Smt.Sushma

Pahwa, details of bank accounts of all the legal representatives,

death certificate of Anil Pahwa and affidavit regarding acceptance

by powers of attorney holders, were placed before the Official

Liquidator.

8. The legal representatives submitted in the objections that

Rule 280 of the Companies (Court) Rules, 1959 confers power on

Official Liquidator to dispense with the submission of share

certificates or like authority, in case of the deceased

(4 of 19) [COP-12/1987]

shareholder/contributory with the sanction of the Court and the

same does not cast any obligation on the legal representatives of

the shareholder/contributory to obtain a succession certificate.

9. The legal representatives further took a specific plea in the

objections that the Company is in Liquidation for more than 32

years and the Official Liquidator should have made an application

under Rule 9 of the Companies (Court) Rules, 1959 for invoking

the inherent powers of the Court to dispense with the submission

of succession certificate and the Official Liquidator should have

accepted the indemnity bond and duly sworn affidavits, as

sufficient authority to permit payment of claims of all the legal

representatives to meet the ends of justice.

10. The legal representatives in their objections prayed that this

Court may direct the Official Liquidator to dispense with filing of

succession certificate of the legal representatives of the

shareholder/contributory; accept the indemnity bond of the

shareholder/contributory; and expedite disbursement of return of

capital to Smt.Sushma Pahwa and all the legal representatives of

late Shri F.C.Pahwa.

11. Counsel appearing for the Official Liquidator Mr.Gaurav

Saraswat Sharma has made following submissions:-

11A. The Official Liquidator can act only in accordance with the

Rule 280 of the Companies (Court) Rules, 1959 and

according to the said Rule, if claim made, in respect of a

dividend due to a deceased creditor or a return of capital due

to a deceased contributory, is Rs.500/- or less, then only the

(5 of 19) [COP-12/1987]

Official Liquidator, on satisfying himself as to the claimant's

right and title to receive the dividend or the return, as the

case may be, can apply to the Court for sanctioning the

payment of such dividend or return to the claimant without

production of the succession certificate.

11B. In the present facts of the case, the legal representatives of

original shareholder/contributory since have a claim of more

than Rs.500/- and no succession certificate is produced by

them before the Official Liquidator, the claim of the legal

representatives cannot be entertained by the Official

Liquidator.

11C. The objection raised by the legal representatives of the

original shareholder/contributory to get the requisite return

of their money can only be dealt with in accordance with

Rule 280 of the Companies (Court) Rules, 1959.

11D. The inherent power of the Court, as provided under Rule 9 of

the Companies (Court) Rules, 1959 may not be invoked by

this Court, as there is a specific provision under Rule 280 of

the Companies (Court) Rules, 1959 in respect of payment of

dividend or return of capital due to a deceased

creditor/contributory.

11E. Rule 9 of the Companies (Court) Rules, 1959 is couched in

such language where the Court can exercise inherent power

by issuing directions or passing orders, which may be

necessary to secure the ends of justice or to prevent the

abuse of process of law.

(6 of 19) [COP-12/1987]

11F. Neither there is an abuse of process of law nor the ends of

justice will be defeated if the legal representatives of the

original shareholder/contributory are asked to produce the

succession certificate.

11G. Acceptance of prayer/objections of the legal representatives

of the original shareholder/contributory will be like

permitting a thing to be done indirectly as the same thing

cannot be done directly.

12. Counsel appearing on behalf of the Official Liquidator, in

support of the submissions made, placed reliance on the following

judgments:-

a. Kishore V. Patel & Ors. Vs. Patel Engineering Co.Ltd. & Ors. reported in (1994) 79 Company Cases 53 (Bom.)

b. Maytas Properties Ltd. Vs. Mr.Krishna Kilaru & Mrs.Sreelatha Kilaru reported in (2014) 183 Company Cases 569 (AP)

c. Jindal Securities P.Ltd. & Ors. Vs. Sistema Shyam Teleservices Ltd. & Ors. reported in (2015) 190 Company Cases 292 (Raj.)

d. Shree Hari Agro Industries Ltd. & Ors. Vs. Deepak Vegpro P.Ltd. & Ors. reported in (2016) 196 Company Cases 125 (Cal.)

e. S.K.Jain Vs. Sudarshan Chits (India) Ltd. (In Liquidation) reported in (2016) 196 Company Cases 327 (Ker.)

f. Ram Chand & Sons Sugar Mills Pvt.Ltd. Vs. Kanhaya Lal Bhargava & Ors. reported in AIR 1966 SC 1899

g. Jaipur Mineral Development Syndicate, Jaipur Vs. The Commissioner of Income Tax, New Delhi reported in (1977) 1 SCC 508

h. K.K.Velusamy Vs. N.Palanisamy reported in (2011) 11 SCC 275.

                                               (7 of 19)                  [COP-12/1987]


i.    Viyyumma & Ors. Vs. Official Liquidator reported in
      (1999) 98 Company Cases 571 (Ker.)

j.    In Re: Hariganga Alloys Steel Ltd. (In Liquidation) &

Ors. Etc. Etc. reported in (2009) 151 Company Cases 405 (Bom)

13. Per contra, Mr.Anant Kasliwal, Senior Counsel appearing for

the legal representatives of the original shareholder/contributory

has made following submissions:-

13A. The power given to the Official Liquidator to settle the claim

of a deceased creditor/contributory is not dependent on the

succession certificate alone and claimant's right and title to

receive the dividend or return, can be examined in absence

of succession certificate and in the present case, the Official

Liquidator has used the words "succession certificate" alone

but if "like authority" is also available with the legal

representatives of the deceased creditor/contributory, then

such power can be exercised by the Official Liquidator, in

absence of succession certificate.

13B. The very concept of putting outer limit of settling the claim

upto Rs.500/- without production of succession certificate

was introduced by the legislature while framing the

Companies (Court) Rules, 1959 and the legislature

intentionally has used the words "like authority" in the Rule

280 of the Companies (Court) Rules, 1959 and the

legislature in its own wisdom was contemplating the difficulty

of grant of succession certificate and accordingly, payment

has not been made dependent on succession certificate

alone.

(8 of 19) [COP-12/1987]

13C. The legislature, if has used any word in enactment, the same

has got meaning & purpose and no word of Legislation is

superfluous or without having any meaning.

13D. Rule 9 of the Companies (Court) Rules, 1959 has conferred

inherent power on the Court and even if there is a specific

Rule which limits or affects the powers of the Court, the

Court for securing ends of justice or to prevent abuse of

process of law, can pass directions or can pass such orders

which are necessary.

13E. Though Rule 280 of the Companies (Court) Rules, 1959 itself

provides a window of entitlement to the legal representatives

of the deceased contributory by producing any other

valuable and authoritative document about entitlement and

even if the word "like authority" is not interpreted equal to

succession certificate, then this Court under Rule 9 of the

Companies (Court) Rules, 1959 can always give directions to

release the fund in favour of the legal representatives of the

deceased shareholder/contributory.

13F. The fact about death of original contributory has come on

record and one of his sons has also passed away and one of

the shareholders i.e. wife of late Shri F.C.Pahwa is about 90

years old and as such, the Company which has been wound

up in the year 1987, if has some surplus amount, after

setting the claim of the secured creditors, the right of the

legal representatives should not be defeated only on account

of not having the requisite succession certificate.

(9 of 19) [COP-12/1987]

13G. Grant of succession certificate is not a ministerial act or any

administrative order which is passed by the competent civil

court. The grant of succession certificate is a lengthy and

cumbersome procedure and considering the facts of the

present case, it will be impossible for people with advance

age, to apply for succession certificate and get the same in

reasonable time.

13H. If adequate indemnity bond and other requisite affidavits are

filed for ensuring the payment to right person and right is

also given to the Official Liquidator to take action, if any

claim is found to be bogus or any entitlement is doubted, in

such an eventuality, the Official Liquidator is vested with the

power to recover the amount and as such the rightful claim

of the legal representatives of the deceased contributory

may not be made dependent on the succession certificate

alone.

14. Senior Counsel, appearing for the legal representatives of

the deceased contributory, in support of his submissions, has

placed reliance on the following judgments:-

a. Official Liquidator, High Court, Calcutta Vs. Income Tax Officer, "K" Ward, Companies District-III & Ors. reported in (1981) 51 Company Cases 572.

b. Britannia Engineering Company Ltd. In re: (In liquidation) reported in (1983) 54 Company Cases 277.

c. Rai Mathura Prasad Vs. Hanuman Prasad Bhagat & Ors. reported in (1984) 56 Company Cases 467.

d. L. RM. K. Narayanan & Anr. Vs. Pudhuthotam Estates Ltd. & Ors. reported in (1992) 74 Company Cases 30.

                                            (10 of 19)           [COP-12/1987]


e.    Action Ispat & Power Pvt. Ltd. Vs. Shyam Metalics &
      Energy    Ltd.    &    Ors.     [Co.App. 11/2019  &

C.M.No.31047/2019, C.M.No.34726/2019] decided on 10.10.2019 by Delhi High Court.

15. I have heard rival submissions made by counsel for the

parties and with their assistance perused the material available on

record.

16. Before adverting to the rival submissions, it would be

appropriate to quote Rules 9 & 280 of the Companies (Court)

Rules, 1959, as follows:-

"9. Inherent powers of Court.-Nothing in these Rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.

280. Payment of dividend or return of capital due to a deceased creditor or contributory.-Where a claim made in respect of a dividend due to a deceased creditor or a return of capital due to a deceased contributory is Rs. 500 or less, the Official Liquidator may, upon satisfying himself as to the claimant's right and title to receive the dividend or the return as the case may be, apply to the Court for sanctioning the payment of such dividend or return to the claimant without the production of a succession certificate or like authority. Where the Court sanctions the payment. the Official Liquidator shall make the payment upon obtaining a personal indemnity from the payee."

17. This Court, on bare perusal of Rule 280 of the Companies

(Court) Rules, 1959, finds that if the Official Liquidator receives a

claim in respect of dividend due to a deceased creditor or return of

capital due to a deceased contributory and the said claim is upto

Rs.500/- or less, the Official Liquidator can satisfy himself about

claimant's right and title to receive the dividend or the return of

capital, as the case may be, and he can apply to the Court for

sanctioning the payment of such dividend or return to the

(11 of 19) [COP-12/1987]

claimant without the production of succession certificate or like

authority and if the Court sanctions the payment, the Official

Liquidator shall make the payment on obtaining a personal

indemnity from the payee.

18. This Court finds that if the claim of a deceased creditor is

made by any claimant showing himself to be his legal

representative, then the Official Liquidator has to satisfy himself

about the claimant's right and title to receive the dividend and

insistence of succession certificate or like authority, may not be

made by him, if the claim is for Rs.500/- or less.

19. This Court finds that power given to the Official Liquidator is

for the purpose of considering the claimant's right and title, as per

his entitlement and he has to ensure that the claimant is rightful

owner, on behalf of the deceased creditor, to receive the dividend

or return of capital due to a deceased creditor and as such, the

succession certificate or like authority is considered as valid

document to determine the entitlement of a rightful person.

20. This Court finds that the word "like authority" which has

been used in the Rule 280 of the Companies (Court) Rules, 1959

ensures that if some person is in possession of a valid document

entitling him to receive the dividend or return of capital due to a

deceased creditor, then such person can also put-forward his claim

and the same is not dependent on production of succession

certificate alone. The word "like authority" had been used by the

Legislature and the claimant's right is safeguarded by having

proper documents in his favour and succession certificate has not

(12 of 19) [COP-12/1987]

been made applicable in all the claims but the other documents

having same value in the eye of law can also be produced before

the Official Liquidator.

21. This Court finds that if Rule 280 of the Companies (Court)

Rules, 1959 is to be interpreted in the manner as canvassed

before this Court to the extent of insisting only upon production of

succession certificate in respect of a claim which is more than

Rs.500/-, then the claim of several claimants will be defeated and

even the preferential claims, as have been provided under Section

529A of the Companies Act, 1956, may not be able to get their

dues.

22. This Court finds that Section 529A of the Companies Act,

1956 provides priority to be assigned for payment of different

debts in winding up of a company and workmen's dues are placed

at first priority thereafter dues are paid to the secured creditors.

This Court, if accepts the interpretation as given by counsel for the

Official Liquidator, then it finds that for a claim of deceased

workman, if it is more than Rs.500/-, the claimants i.e. legal

representatives of that workman, will be required to produce a

succession certificate and then only his dues will be paid. Such

interpretation, as put-forward by counsel for the Official Liquidator,

would in fact be negating the purpose for which Section 529A of

the Companies Act, 1956 has been enacted, which provides for

preferential payments.

23. This Court further finds that likewise in other cases where

the Company is wound up and after settling the claim of the

(13 of 19) [COP-12/1987]

secured creditors, if something is paid back from the surplus

amount to the legal representatives of the deceased creditors, the

insistence of production of succession certificate, will be harsh a

condition. This Court, in the facts of the present case, finds that

one of the original contributories late Shri F.C.Pahwa has expired

in 2014 and one of his sons Anil Pahwa has also expired and now

the legal representatives of late Shri F.C.Pahwa i.e. his wife who is

almost 90 years of age is asked to produce the succession

certificate, the same would be travesty of justice.

24. This Court further finds that Rule 9 of the Companies (Court)

Rules, 1959 has also been enacted to give full effect to the

provisions of Companies (Court) Rules, 1959 and the same have

been framed for giving effect to the various provisions of the

Companies Act, 1956.

25. This Court finds that under Section 9 of the Companies

(Court) Rules, 1959, the Court has been provided inherent power

for securing ends of justice and any Rule which is provided in the

Companies (Court) Rules, 1959 has to be interpreted in such a

manner which secures ends of justice. The opening words of Rule

9 of the Companies (Court) Rules, 1959 provides that it is a "non-

obstante clause" and it has to be interpreted liberally with

different powers provided under the Companies (Court) Rules,

1959 and the same cannot be interpreted in such manner that the

very purpose of considering the claim of the deceased

contributory, gets frustrated.

(14 of 19) [COP-12/1987]

26. This Court also cannot become oblivious of the fact that

grant of succession certificate is not a mere issuance of an

administrative order or it is only a ministerial act which is to be

performed by the Court.

27. This Court may not be misunderstood to say that succession

certificate has no meaning or authority for claiming any right or

entitlement of claimant to get dividend or return of capital due to

a deceased contributory, however, the Rule making authority has

provided that not only the succession certificate but also "like

authority" can be relevant for payment of dividend or return of

capital and as such the Official Liquidator has been given power to

settle the claim upto Rs.500/- or less without production of

succession certificate or like authority.

28. The next issue is with regard to invoking power of this Court

of sanctioning the payment to be made by the Official Liquidator

and at the same time, the Court has been conferred power under

Rule 9 of the Companies (Court) Rules, 1959 to pass necessary

orders for ends of justice. There is no quarrel on the proposition

that when there is a specific provision in any statute and inherent

power is also given in the said statute, then such inherent power

is required to be exercised by having harmonious construction of

both the clauses. The inherent power of the Court nowhere means

that specific statutory provision can be violated, however, the

purposeful construction is required to be made by interpreting

both the powers for securing ends of justice.

(15 of 19) [COP-12/1987]

29. This Court finds that on the one hand the Official Liquidator

has been given power to settle the claim of the claimants upto

Rs.500/- without insistence of succession certificate and on the

other hand if the claimant makes a claim of more than Rs.500/-,

then insistence of succession certificate is to be made by the

Official Liquidator before he entertains the claim. This Court finds

that such interpretation of Rule 280 of the Companies (Court)

Rules, 1959 will in fact defeat the very object for which power has

been given to settle the claim of the claimants and only on

account of non-production of succession certificate, the claimant

should not be deprived to get his/her due payment.

30. This Court finds that the Karnataka High Court in the case of

M.Krishnamurthy through LRs Vs. Official Liquidator of

M/s.Ideal Jawa (India) Ltd. [C.A.No.969/2009] vide order

dated 16.12.2009 held, while exercising inherent powers under

Rule 9 of the Companies (Court) Rules, 1959, that ends of justice

would be met by not insisting upon the legal heirs of the deceased

workman to secure a succession certificate and dispensed with its

production and directed to accept the survivorship certificate and

a personal indemnity of all the legal heirs. The operative portion

of the order dated 16.12.2009 is reproduced hereunder for ready

reference:-

"4. Having heard the learned counsel for the parties, perused the pleadings, there can be no doubt that dividend due to a deceased creditor, if Rs.500/- or less can be made over to the legal representatives without production of succession certificate but on obtaining a personal indemnity from the payee. However, Rule 9 of the Rules inheres in this Court the power to issue directions or pass orders as may be necessary in the ends of justice. Having regard to the fact that the deceased was a workman whose claim for wages has been

(16 of 19) [COP-12/1987]

pending for over several years and that the Official Liquidator after adjudicating the claim determined Rs.70,131/- as the dividend payable to the workman, coupled with the fact that the legal heirs of the deceased have produced the survivorship certificate issued by the jurisdictional Tahsildar, it occurs to my mind that ends of justice would be met by not insisting upon the claimants to secure a succession certificate, but dispense with its production and accept the survivorship certificate and a personal indemnity of all the applicants on payment of the said sum to the first applicant, exercising inherent powers under Rule 9 of the Rules.

Application is accordingly ordered."

31. This Court finds that the Karnataka High Court in the case of

Smt.Lakshmamma & Anr. Vs. The Mysore Kirloskar Ltd.

[OSA No.41/2013] decided on 23.01.2014 has considered the

issue of grant of claim to the employees or their legal

representative after accepting the survivorship certificate issued

by the competent Tehsildar and settled their dues after taking

indemnity bond. The Karnataka High Court has further opined that

the claimants cannot be relegated to the Civil Court to obtain

succession certificate. The relevant portion of the order dated

23.01.2014 is reproduced hereunder:-

"5. The records clearly disclose that the husband of the first appellant and the father of the appellant 2, late B.H.Karibasappa was an employee of the Mysore Kirloskar Limited. The said Company was ordered to be wound up by this Court vide its order dated 01-04-2004. The said B.H.Karibasappa, died on 21st November 2011. In pursuance of the notification issued by the Official Liquidator inviting applications from the creditors and employees, the appellants filed the claim petition along with the Survivorship Certificate issued by the Tahsildar and also an Indemnity bond. However, the said claim petition was not considered. The Company Application filed by the appellants seeking direction to consider their application was rejected by the Company Judge solely on the ground that no document has been produced to show that they are the legal representatives of the deceased Karibasappa, and Succession Certificate from competent authority is not produced. The records further disclose that in view of winding up of the Mysore Kirloskar Limited, large number of employees working in the said company had filed claim

(17 of 19) [COP-12/1987]

petitions. In the meantime, some of the employees died. Since the Official Liquidator failed to consider the claim petition, the appellants have approached this Court seeking direction to the Official Liquidator to consider their claim. This Court, in large number of cases issued direction to the Official Liquidator to consider the application filed by the employees or their legal representatives after accepting the Survivorship Certificate issued by the competent Tahsildar and settle their dues by taking Indemnity Bond. In Company Application No.1415/2012 disposed of on 14th February 2013, similar order has been passed. We are of the opinion that the appellants cannot be relegated to the Civil Court to obtain Succession Certificate. In large number of cases, the Official Liquidator on accepting the Survivorship Certificate issued by the competent Tahsildar and taking the Indemnity Bond from the applicants has settled the dues. Hence, we are of the opinion that similar direction can be issued to the Official Liquidator to meet the ends of justice. Accordingly, we pass the following:

ORDER The appeal is allowed. The order dated 22-4-2013 made in C.A.No.1417/2012 is set aside. The Official Liquidator is directed to consider the application of the appellants to settle their claim, accepting the Survivorship Certificate issued by the competent Tahsildar and by obtaining Indemnity Bond from them as expeditiously as possible."

32. This Court finds that the Gujarat High Court in the case of

O.L. of Gujarat Rubber Works Ltd. (In Liquidation) & Others

etc. etc. [Company Petition No.62/1985 & Official

Liquidator Report No.139/2013] decided on 20.02.2014 has

also permitted the Official Liquidator to make payment under Rule

280 of the Company (Court) Rules, 1959 without insisting for

succession certificate and to file indemnity bond-cum-affidavit by

the legal heirs of deceased workers. The relevant portion of the

order dated 20.02.2014 is reproduced as follows:-

"11. In view of the above, the prayers prayed for in is not necessary to be granted. In view of the fact that respondent No.2 Union is directed to file proper proof as the Official Liquidator is permitted to make payment to individual workers only after proper verification, the Official Liquidator is permitted to make payment under Rule 280 of the Company (Court) Rules, 1959 without insisting for

(18 of 19) [COP-12/1987]

succession certificate and the legal heirs of such workers are required to file indemnity bond-cum-affidavit."

33. This Court finds that counsel appearing for Official Liquidator

has placed reliance on a judgment rendered by the Bombay High

Court (Nagpur Bench) in the case of Hariganga Alloys Steel Ltd.

(In Liquidation) & Others etc. etc. [Company Petition

No.6/1999 & Company Application Nos.105-115/2008]

decided on 24.10.2008, whereby the Bombay High Court has

considered the scope of Rule 280 of the Companies (Court) Rules,

1959 and found that succession certificate is one under the

provisions of Indian Succession Act and the word "like authority"

will necessarily mean an authority to receive payment granted by

similar competent forum after due notice of claim before it to all

possible rival claimants or legal heirs and such authority,

therefore, has to be from any other forum given jurisdiction in

that respect by some statute and as such, "like authority" do not

dilute the provisions of Rule 280 of the Companies (Court) Rules,

1959 in any way but only provide for an alternative to succession

certificate if such alternative is available legally.

34. This Court, with due respect to the observation made by

Bombay High Court, finds that the word "like authority" which has

been interpreted has been assigned different meaning altogether

and in the opinion of this Court, if the Rule making authority has

put the word "like authority" as an alternative of succession

certificate, then the same is required to be given due meaning.

35. This Court accordingly finds that the circumstances of each

case are required to be considered and if adequate steps are

(19 of 19) [COP-12/1987]

taken to satisfy the Official Liquidator about entitlement of a

claimant of deceased contributory, the insistence of succession

certificate may not be made in each and every case. The

submission of indemnity bond and survivorship certificate issued

by a competent authority can be requisite and adequate safety for

the purpose of settling the dues in favour of the legal

representatives of the deceased contributory.

36. This Court accordingly finds that the prayer made by the

Official Liquidator in his report No.11017 dated 10.02.2021 to

produce succession certificate by the legal representatives of the

deceased contributory late Shri F.C.Pahwa cannot be granted and

if the legal representatives of the deceased contributory furnish

indemnity bond and survivorship certificate, issued by a

competent authority i.e. Tehsildar, the Official Liquidator can

consider their claim by accepting the indemnity bond and

survivorship certificate.

(ASHOK KUMAR GAUR),J

Solanki DS, PS

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